Algety Telecom was founded in 1999 by a team of France Telecom engineers, developing a technology for high-speed data transmission. Shortly after founding, Algety was merged with US-based Corvis, followed by an IPO of the combined companies valued at $10 billion.
Following years of research, Dr. Thierry Georges and his team at France Telecom R&D pioneered an optical transmission system based on a peculiar physical phenomenon called the Soliton – a “solitary” wave that maintains its shape while traveling at constant speed. Soliton waves are found in many media (fluids, electromagnetic).
In physics, the technology implied being able to create an electromagnetic wave that does not change amplitude or frequency, in other words that maintains its energy and suffers no dispersion. In optics, it would allow the transmission of data at a single frequency on an optical fiber strand at high speed. The France Telecom team was able to transmit one trillion bits of data per second – the equivalent of transmitting the entire contents of the Library of Congress in less than 30 seconds down a single fiber. Realizing the power of the technology, we helped the founding team assess the market potential and launch a company to develop and commercialize the technology. Algety Telecom was founded in 1999.
Seed and Expansion Financing
We provided the seed and expansion financing, and eventually Dr. Ossama Hassanein joined as Chairman of the Board. The infusion of capital supported Algety’s ongoing development of wave division multiplexing (WDM) systems that utilized a new generation of solitons. Algety’s optical switching platform enabled service providers to transition from inefficient, voice-centric networks to more efficient, data-optimized networks. It also allowed service providers to realize significant cost advantages by eliminating the need for electrical regeneration on optical long haul networks, decreasing network costs by 50 percent, while at the same time boosting capacity, efficiency and reliability of the networks to support bandwidth intensive applications.
Algety speedily grew its sales and customer support teams, formed strategic partnerships, and matured its research and development efforts. Within one year, the Company was able to demonstrate the practical use of this lightning speed technology: it could transmit 24 million simultaneous telephone conversations on a single strand of fiber across the Atlantic!
Algety was well positioned as a leading edge technology company. However, manufacturing and deploying equipment based on the soliton technology would have been expensive, risky, and time consuming. To mitigate the risks, we approached four leading communication equipment vendors to explore the possibilities of a merger. In March 2000, we completed negotiations with Corvis Corporation which acquired Algety for stock valued at $2 billion at the companies’ IPO later that year – a respectable return on the $31 million invested in the Company.